Statement by IMF Managing Director Dominique Strauss-Kahn at the Conclusion of his Visit to Mauritania

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement on August 1, 2008 in Nouakchott at the conclusion of his visit to Mauritania:

"It has been a great pleasure to visit Mauritania. I wish to thank the President, Mr. Sidi Mohamed Ould Cheikh Abdallahi for the warm hospitality extended by the Mauritanian government to participants in the seminar for African Governors of the IMF and the World Bank.

"The discussions with the African Caucus gave me an opportunity to hear first-hand from leaders in the region how they are facing the difficult challenges posed by the recent sharp increases in food and fuel prices. The inflationary pressures resulting from these shocks threaten to derail macroeconomic stability, growth, and efforts to achieve the Millennium Development Goals in many sub-Saharan Africa countries. I underscored that in the short term, targeted social safety net measures should be implemented to provide income support to the poorest and that the IMF is ready to help by providing policy advice, technical assistance, and financial support, including through the Exogenous Shocks Facility. Indeed, we are already increasing lending under existing arrangements in nearly a dozen countries that have balance of payments needs. We have also urged donors to step up assistance.

"I also noted to the Governors that over the longer term, the best way to respond to the food and fuel crisis is to increase food supply, conserve energy, and develop new energy sources. This will require increased investments in infrastructure, particularly in the power and agriculture sectors, which was the focus of the Caucus seminar today. I want to thank the Governors, the heads of China Development Bank and the Islamic Development Bank, and World Bank colleagues for their thoughtful contributions to the discussions. I emphasized that to be productive, such investment must be accompanied by sustainable macroeconomic policies and good systems of expenditure control and project management, and financed in a cost effective way, including through fiscal measures, mobilizing private sector investment, and securing grants or highly concessional financing. Nonconcessional borrowing can be accommodated on a case-by-case basis for projects with high economic returns, for which concessional funds are not available, if the resulting debt service is consistent with medium-term fiscal and debt sustainability. I noted that the Fund, together with other partners, stands ready to help countries develop strong public financial management systems and debt management frameworks to manage public infrastructure investment better.

"I also had very fruitful bilateral meetings with President Sidi Mohamed Ould Cheikh Abdallahi, Prime Minister Yahya Ould Ahmed El Waghef, and Governor Kane. I reiterated the Fund's strong support for the authorities' emergency food security program and commended the comprehensive and proactive stance that they have taken to address this critical issue. I encouraged them to closely monitor the food security situation and further expand domestic production. I also congratulated the authorities on the significant progress they have made in implementing an ambitious program of economic reform. The Fund supports these efforts under a Poverty Reduction and Growth Facility (PRGF) program, which aims to speed up economic growth, reduce unemployment and raise the standard of living for the Mauritanian people."